QUESTION 7 Review the following figure. Suppose the price of gasoline is $1.60 per gallon. . What would happen to the quantity demanded? . What would happen to the quantity supplied? . At $1.60, is the market in equilibrium, a shortage, or a surplus? P ($ per gallon) $2.20 $1.80 $1.40 $1.20 $1.00 50.60 Excess supply or surplus S An above-equilibrium price Equilibrium price A below equilibrium price Excess demand or shortage D 300 400 500 600 700 800 900 Quantity of Gasoline (millions of gallons) rise fall surplus shortage no change a shift in demand a shift in supply
QUESTION 7 Review the following figure. Suppose the price of gasoline is $1.60 per gallon. . What would happen to the quantity demanded? . What would happen to the quantity supplied? . At $1.60, is the market in equilibrium, a shortage, or a surplus? P ($ per gallon) $2.20 $1.80 $1.40 $1.20 $1.00 50.60 Excess supply or surplus S An above-equilibrium price Equilibrium price A below equilibrium price Excess demand or shortage D 300 400 500 600 700 800 900 Quantity of Gasoline (millions of gallons) rise fall surplus shortage no change a shift in demand a shift in supply
Chapter1: Making Economics Decisions
Section: Chapter Questions
Problem 1QTC
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Q7.
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Introduction
Market equilibrium: At the market equilibrium we have demand equals to supply. Or at market equilibrium point the maximum price which the consumers are willing to pay is exactly equals the minimum price at which the sellers are willing to sell.
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